Romania: For sale: crisis stricken country
1 June 2010
Hard hit by the crisis and forced to contend with austerity measures and striking workers, Romania is on the verge of bankruptcy. România liberă worries that Russia and China will step in to fill the vacuum left by the country's political leaders and Western investors.
The President has admitted that Romania is bankrupt, and the governor of the National Bank of Romania, technocrat Mugur Isarescu, has been heard to remark that the state is now facing the same problems that prevailed when he was originally appointed to rescue the situation. All of the evils of the world appear to have suddenly descended on the country without warning, and it seems that no one foresaw the crisis before it was too late.
Romania's Greek-style crisis
The artificers and victims of the machinations that have now resulted in their own downfall, Romania's politicians have always placed their own interests before those of the nation, even when they were aware that their actions could lead to disaster. President Traian Basescu has suddenly woken up to the possibility of a "Greek-style" crisis in the country, but only last year he was content to sit by and watch while Emil Boc's democratic liberal government ramped up spending and drove the country into further debts. You might wonder why the President did not take issue with the government's purportedly philanthropic approach, and the answer to that question is all too simple: the President's main objective was not to guide Romania through the crisis, but to obtain a second term in office. If this had not been the case, Traian Basescu would have forced Emil Boc & Co. to cut public service jobs, reduce salaries and deny funding to vote catching measures.
Now that the President has acknowledged danger of a "Greek-style" crisis in Romania, it might be time to wonder if the term "Greek-style" really takes into account the major historical differences and differences in terms of potential that characterise Greece and Romania. Of course, Basescu is right in as much as both countries are facing overwhelming debts, and it is also true that Romania like Greece was very slow to respond to a worsening situation. The President should have come to grips with the problem immediately after his election campaign when he had the opportunity to appoint a prime minister with a strong background in economics and the necessary vision to avoid an imminent financial disaster.
Both countries destined for the butcher's block
Now at least we have a President who has acknowledged the possibility of a "Greek-style" crisis, but it is an acknowledgement that overlooks the fact that Western investors will find the bargains to be had in Greece much more appealing than the ones that are available in Romania. Now that both countries are destined for the butcher's block, it is clear that the wares on sale will not be the same, nor are they likely to attract the same buyers. In Greece, which has a modern transport infrastructure, a well-developed tourist trade and an agricultural industry that has benefited from European funding, Western investors will be eager to seek out concession deals and whatever else is on sale. However Romania, with its roads that are continually under construction, its factories that were dismantled years ago, and its backward and much neglected agricultural sector, will become a market for Eastern powers – at best China and perhaps even Russia – who are not only seeking bargains, but who are also attracted by an opportunity to discreetly extend their sphere of influence.
Given a choice, the Germans will relish the chance to buy up property on the Mediterranean shores of Greece, which has the added attraction of being the European country with the highest percentage of indigenous German speakers, but they will not have much interest in Romania, which they perceive as too far away, too backward, and just a bit more corrupt. So we may well have a "Greek-style crisis," but Greece and Romania will have to contend with two completely different outcomes which are largely aligned with their radically different histories. Greece has always been coveted by the West, while Romania has always had to battle with the danger presented by Eastern powers.